A fledgling Iowa City company has shut down its auction website, upsetting customers and prompting the state to take steps to recoup a $250,000 award.

The Iowa City Press-Citizen reports that Dibzees, an online penny auction business that grew from a University of Iowa class project, took its last bids in July before ceasing its auctions. But some site users say they're still owed merchandise won in auctions.

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The company announced July 15 that its website would be undergoing maintenance and upgrades. But Dibzees CEO and co-founder Casey Everts now says the company does not plan to resume auctions.

Now, the Iowa Economic Development Authority says it will take legal action after Dibzees failed to repay the award issued for the company to improve its website.